issue five - dickerson law
TRANSCRIPT
DICKERSON DIGEST ISSUE FIVE - APR- 2020 RISKY BUSINESS
DOUBLE PAYMENT RISK FOR SHIPPERS
AND HOW TO REDUCE EXPOSURE
Imagine you hire a landscaping com-
pany to transform your backyard into your personal oasis. The landscaping company hires workers to do the job, then the company sends you a bill, which you pay. But suppose the land-scaping company doesn't pay the workers, and they send you a bill for the job. Obviously, you shouldn't have to pay again. If the workers take you to court, however, you may be ordered to do just that. In cases of double payment liability, innocent Shippers find themselves ordered to pay for services twice. The potential for double payment liability may arise any time a load moves—regardless if freight Broker or forwarder, is in-volved. The world of cargo contracts, insurance, and liability can be com-plex and possibly not be 100% ad-dressable. Shippers who aren't care-
ful can find themselves facing legal fees. Contracting with a reputable Broker can protect you from ending up in this situation. The following are steps to take to reduce the exposure to double payment risk. Characteristics of Reputable Bro-
kers and Carriers It is a well-known fact among the transportation indus-try that utilizing the services of Bro-kers to be intermediaries to ship goods makes economic sense. With-out Brokers or forwarders, Shippers would have to allocate additional re-sources to locating and negotiating with motor Carriers and would likely incur higher transportation costs. So how can Shippers avoid being taken to court for double payment liability cases? It starts by exercising due dili-gence and knowing the characteristics of a "reputable Broker".
Money matters If you do your homework, it is easy to determine a Broker's or forwarder's financial sta-bility. Require a prospective Broker or forwarder to provide you its D-U-N-S Number, an identification code as-signed to each physical location for companies registered with D&B. Use the number to help track the Broker during your due diligence. Of particu-lar interest in evaluating a freight Bro-ker is its D&B PAYDEX score, which evaluates a company's timeliness in debt payments. Scores range from one to 100, with higher scores gener-ated by a company's payment of debts prior to due date terms. If a company, on average, pays its debts on time (typically within 30 days), it earns a PAYDEX score of 80; if it pays 30 days before the due date, it earns a PAYDEX score of 100. A PAYDEX score of less than 80 raises a red flag.
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DICKERSON DIGEST RISKY BUSINESS
DOUBLE PAYMENT RISK FOR SHIPPERS AND HOW TO REDUCE EXPOSURE
Surety Bonds and Insurance You may consider being sure that any Broker you do business with post a surety bond greater than the amount of business you expect to do over a six-month time period. However, this may eliminate many Brokers from consideration as most sureties re-quire 150% collateral, which many smaller Brokers will not have. It may also increase your Brokerage fees, as they might insist that you pay the bond premium. Instead, when vetting for reputable Brokers, keep these three types of insurance in mind: insurance supplementing the Broker's bond/trust fund, contingent cargo insurance, and general liability insurance. The FMCSA requires regis-tered freight Brokers to post a mini-mum Broker's bond or establish a $10,000 trust fund so it can pay Ship-pers or motor Carriers if the Broker fails to carry out its contracts. Most Brokers just get by with the $10,000 minimum; however, a Broker can choose to purchase supplemental insurance/bond coverage for higher
limits. The supplemental limits pro-vide a layer of insurance protection in case a Broker defaults on its obli-gations and burns through the $10,000 bond/trust fund. Supple-mental coverage is typically offered in increments up to $100,000. While larger supplemental limits may be offered, premiums for these policies are correspondingly higher and must be passed on to a customer. A Broker that carries a higher limit supple-mental policy and remains price competitive is the Broker of choice for several reasons: • First, obtaining supplemental
coverage demonstrates the Bro-ker's commitment to fulfilling its obligations.
• Second, both the bond and sup-plemental policy/bond proceeds are available should the Broker fail in that commitment.
• Third, insurers offering such cov-erage require the Broker to meet more stringent underwriting re-quirements than one who simply
posts a minimum surety bond or trust fund. Think twice about working with a Broker who can't meet those underwriting re-quirements.
Voluntary higher limits coverage should be documented via a certifi-cate of insurance coverage. In addi-tion to bond/trust fund supplements, reputable Brokers also arm them-selves with contingent cargo insur-ance. To protect itself and its cus-tomers, the Broker should secure certificates of coverage for motor Carriers' primary cargo and motor vehicle liability insurance. Additional-ly, a Broker should carry its own con-tingent cargo insurance, which pro-vides coverage if the motor Carrier's primary cargo insurance denies cov-erage or is insolvent. Insurance levels should be adequate to cover the val-ue of the cargo on any one shipment. While $200,000 in contingent cargo coverage is typically adequate, a Shipper whose cargo will exceed that value should require a higher level, which can be accomplished by a spe-cial endorsement to the policy or via spot coverage. Finally, ensure the Broker carries adequate general lia-bility insurance, and get a certificate of coverage. Although your company probably will not qualify as an in-sured party under a Broker's general liability policy, the fact that the Bro-ker carries such insurance is a good sign. A Broker operating without a general commercial liability policy of at least $1 million should raise an-other red flag.
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ISSUE FIVE - APR- 2020
DICKERSON DIGEST RISKY BUSINESS
DOUBLE PAYMENT RISK FOR SHIPPERS AND HOW TO REDUCE EXPOSURE
Control Bill of Lading with Contracts Those in the transportation industry know that a Bill of Lading (BOL) is one of the most important docu-ments in the shipping industry. The Bill of Lading is a legally binding doc-ument providing the driver and the Carrier all the details needed to pro-cess the freight shipment and invoice it correctly. Preparing a Bill of Lading is a common practice in the transpor-tation industry, but I am proposing you add additional layers of protec-tion by drawing up contracts that will have control of the Bill of Lading. This means you will need to draft a con-tract with each Carrier that they WILL NOT Broker any freight. You should monitor this with each ship-ment receipt and confirm that no other Carrier charges were made. In addition, you should have a contract with each Broker in which they are required to have written contracts with all of the Carriers they intend to use, in which the Carrier specifically designates that the Broker is the sole
agent for collection and that the Car-rier waives any right to collect from the consignor or consignee if the Broker has been paid. Also require that copies of all contracts with all Carriers the Broker intends to use be forwarded to you for review and con-firmation. This needs to be reviewed and maintained on a regular basis. This is the key thing that must be done every time to ensure a result you can be happy about. This amounts to having to do a lot of work on your part. Creating a system for drafting contracts and reviewing contracts reduces risk and helps to ensure your protection, but of course, nothing 100% fool proof. Having a competent attorney on your team who is understands the issues you face is an important aspect of the success of your systems. I recom-mend looping in an expert attorney to do this for you. Armed with this information and research, the key will be to implement a three-part system of vetting Brokers and Carri-
ers (since they may likewise Broker the freight). The system, as men-tioned above, includes determining their financial stability, ensuring they have adequate insurance coverage and the key component of including an attorney familiar the logistics of logistics to draft contracts that con-trol the Bill of Lading. An attorney that can confidently draft and review contracts that control the Bill of Lad-ing will be instrumental to helping Shippers strategically avoid risk and lawsuits. And as I mentioned before, this system must be done every time for everyone. This will contractually bind the Carrier to seek payment from Broker and eliminate liability of the Shipper when the Broker has been paid. I end this article with one caveat. You can do all this and still get the screwed and sued, but imple-menting solid systems, the more you minimize your risk and liability. If you have specific questions on how to implement this three part system, I invite you to contact our firm.
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ISSUE FIVE - APR- 2020
ISSUE FIVE - APR- 2020 DICKERSON DIGEST SHARING IS CARING
3 ESSENTIAL DOCUMENTS
BUSINESS OWNERS IGNORE
You might be at the half-way
mark to the anniversary of your entity formation. Or you may have formed your business entity years ago. Either way, we found some startling statistics about business owners who’s business depends on them for it’s exist-ence and found that many had no plan for succession. Here are some survey results of more than 500 business owners that you may feel you are in “shoulder-to-shoulder” company with.
• 80% didn’t have a
power of attorney in place.
• Just 24% had a last will and testament.
• Only 13% had a living trust
• 65% of business own-ers had nothing at all!
What is the solution? Estate planning. Insurance, savings, and a good luck charm. These are the three effective elements busi-
ness owners use to protect their business, right? Well, not exactly. While insurance can cover you for unforeseen events like medical emergencies, only estate planning prepares your company for real life worst-case scenarios. Insur-ance, savings, and a good luck charm. Insurance and savings can keep many of your worries at bay, but even the most well-protected businesses can be exposed to risk if you don’t prepare core personal documents. These documents — a will, durable trust, power of attorney and others — get ig-nored if business owners fail to see the value they represent. As time goes by and their business grows, having these pieces in place becomes more than just important. It becomes critical. Defining Success At the core of a business owners’ success is a simple question: What happens when you’re no longer around, whether that’s through early re-tirement, incapacitation, or death? If you see yourself in this scenario, you need a succession plan. Have you thought about what you would do if you encoun-
ter a financial hardship or transfer your ownership to someone else? It might not be pleasant to think about, but succession planning doesn’t have to be a long, drawn-out process, either. It can be as simple as you want to make it. The most important issue here is putting a plan to paper and defin-ing “succession” as you see it. What you need As a business owner, you also have something else to think about. What hap-pens if you have unpredictable medical events that hurt your ability to do business? That be-comes more than just a financial question. It becomes a question of your company’s survival. That’s something the giant, Apple Inc., doesn’t have to worry about, which has a reported $250 Billion in cash reserves. But guess what? You do.
On the next page, I will share three essential legal documents business owners should consider when draft-ing an estate plan.
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DICKERSON DIGEST ISSUE FIVE - APR- 2020 SHARING IS CARING
3 ESSENTIAL DOCUMENTS BUSINESS OWNERS IGNORE
Durable Power of Attorney
You’re the person in charge. All decisions in your company must be run by you – until you need surgery that puts you out of com-mission for a few months. The questions start piling up. Who pays the rent? Who does business with your clients? Who accesses your bank accounts, and how? A Durable Power of Attorney al-lows you to transfer authority to another. This legal document will assign an “agent” to oversee your funds and make financial deci-sions on your behalf. This includes business operations, tax issues, stock transactions, insurance and even claims and litigation. Durable Trust You put your life’s sweat into your business. Then you die unexpectedly. What happens next? No one knows, be-cause you didn’t plan. Your prop-erty and other assets go through probate and someone else makes decisions about what you worked so hard to build. A living trust is the main tool in your estate-planning arsenal. Holding proper-ty in a trust ensures it will go to a trustee rather than through the court system. Last Will & Testament This simple document describes your intentions for your property and debt and perhaps even your buri-al wishes. Essentially, it’s the last “say” you’ll have. Through a will,
you can designate an executor to ensure your will’s terms are car-ried out. This should be someone you trust completely. Business owners are entrusting their exec-utors with not only their family’s well-being but their livelihood, too. It’s an important decision that requires someone very close to you. Making a succession plan
easy Drafting documents can feel uncomfortable, but the rewards
are significant. For the short time business owners spend with a board-certified estate planning attorney, they gain a sense of se-curity that goes beyond insurance and savings accounts. Business owners who have tackled this process usually find it easier than anticipated and the sense of relief is well worth the effort. We invite you to contact our firm today to learn more about succession plan-ning. We can assure you it will be time well spent.
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DICKERSON DIGEST ISSUE FIVE - APR- 2020 THE PROFIT LINE
PAGE 7
RESTAURANTS PIVOT
TO “POP-UPS” TO SURVIVE
Everyone knows
times are difficult
these days. With
social distancing
and limitations set
on where you can be, as well as, a cur-
few being enforced by the local police
department; there is likely stress and
tension at home. Working for a major
food supplier for local restaurants from
Laredo to Zapata, I see the restaurant
industry suffering the most through all of
this and I wanted to share my perspec-
tive on the current crisis and how local
restaurants can pivot their strategy to
survive.
“TO-GO” ordering is limited and not
available in most restaurants. Not to
mention, unfortunately, it does not pro-
vide enough income to have a restaurant
remain open. As a result, they are just
closing as a means to survive and cross-
ing their fingers for the future. Up and
coming restaurants that were just about
to open have been halted since the city
has sent notice that non-essential busi-
nesses must remain closed until further
notice. Instead of being furloughed,
most restaurant owners have had to
make the difficult decision to simply let
go of their employees with no promise of
rehire since they are unsure if they will
be capable of reopening once this coro-
navirus pandemic has ended.
Working in the food industry has given
me the opportunity to know certain
things that are not immediately known
to the public. In an effort to avoid as
much human contact as possible, preor-
dering several weeks ahead has made
fresh product scarce. Eggs and dairy
have shot up in price by an astonishing
amount, yet beef seems to be streaming
along just fine. Chicken is available, albe-
it, at a higher cost than normal. Fresh
chicken wings are mainly unavailable
with no set date on arrival until further
notice. As a result, restaurants have had
to purchase frozen wings, adding to la-
bor costs and time so they are thawed in
the correct way. I anticipate these res-
taurants will risk delaying orders and
losing customers for being without prod-
uct. As of the writing of this article,
Smithfield Foods, the world’s biggest
pork processor, said Easter Sunday it will
shut one of its 48 plants indefinitely due
to a rash of coronavirus cases among
employees and warned the country was
moving “perilously close to the edge” in
supplies for grocers. Slaughterhouse
shutdowns are disrupting the US food
supply chain, crimping availability of
meat at retail stores and leaving farmers
without outlets for their livestock. Here
locally, grocery stores are running low on
product and are in no hurry to restock;
they are using this pandemic to take ad-
vantage of back stock and getting rid of
product that is normally hard to sell.
The food service industry is suffering as
well. I’ve heard some are being faced
with having to let go of employees that
have been with their company for more
than twenty years and furloughing office
workers. Food service representatives
are being told to stay at home as much
as possible to avoid contact with people.
Food service drivers are being provided
with masks and paperless invoices to
minimize contact with customers. They
also are instructed to sanitize between
deliveries and are given a special sanitiz-
er at the dock to use before they go
By Christina Barrientos, Marketing Associate for Sysco Central Texas, Inc.
ISSUE FIVE - APR- 2020 DICKERSON DIGEST THE PROFIT LINE
home to their families. Because deliver-
ies have reduced to an extreme amount,
delivery trucks are now being leased
out to certain chain grocery stores
to help keep those drivers paid and
employed.
The food service representatives are
being faced the pressure to maintain
sales quotas. Without fresh product
at the ready to deliver, food service
providers want their salespeople to
sell as many cleaning supplies as
possible. The issue with that is the
product is currently unavailable and
dates for the supplies’ arrival contin-
ue to be pushed back. Reps are also
at a high risk of losing their job if
they do not keep up with sales quo-
tas and it causes stress amongst eve-
ryone. Their job security is also
threatened along with furloughed
office employees, who are critically
important and assist the outside
food service reps. Some in the inside
and outside sales departments are
not worried about being furloughed,
but of being fired if sales do not con-
tinue.
Liquor stores and beer sales are
booming, though. Here in Texas, the
people that deliver and stock these
items are considered essential work-
ers and are ready to present a docu-
ment stating their essential worker
status in the event they are deliver-
ing and restocking beyond curfew.
Beer is at an all time high, with dis-
tributors resorting to hiring tempo-
rary workers and offering overtime
to employees who will take it.
Certain towns are seeing an influx of
product rather than a lack as well.
For example, pinto beans are fully
stocked in New York while shelves
run empty in other sections. Locally,
we are fully stocked on fresh pro-
duce. Ramen is being purchased by
the case and milk is being purchased
in bulk. Buying in bulk can have its
downside. Consumers are upset
when trying to return it due to spoil-
age. Grocery stores are being wary
of over-buyers as well and refusing
to allow returns on items like toilet
paper, paper towels, milk, eggs and
beef. There is no shortage of dry
supplies, but this pandemic is caus-
ing mass hysteria and making people
feel as though they need to over
stock on certain items. By doing so,
it has forced retailers to limit certain
items in order to serve as many cus-
tomers as possible. Unfortunately,
people who are overstocking on toi-
letries, sanitizers and cleaning sup-
plies are being caught by law en-
forcement for trying to price gouge
product online. In these tough times
it is important to know that hoard-
ing product prevents others who
truly need the product from pur-
chasing it.
On a positive note, res-
taurants can become
“pop-up” shops, or
grocerants. The term
“grocerant,” merges the words
“grocery” and “restaurant,”. In re-
sponse to the empty grocery store
shelves across the country, Sysco is
providing an opportunity to transform
your restaurant dining area into a pop
up shop where your customers can shop
for essential pantry items, while getting
their meal to-go. The move is an effort
to provide a profitable solution and help
pivot foodservice operations, provide
nourishment and a sense of reassurance
in the community. This alternative, tem-
porary, business model during this crisis
will help restaurants bring in customers
safely to purchase the essential pantry
items that they need for their families.
Pop Up Shop products will vary by loca-
tion but will include essentials like as
eggs, condiments, bread, toilet paper,
etc. When local restaurants fill out a
sales exemption form from their
Sysco ordering representative and
participate in this program, Sysco will
provide them with a Pop Up Shop
Toolkit including marketing tools and
social media outlets, to drive the mes-
sage effectively to their customers.
PAGE 8
RESTAURANTS PIVOT TO “POP-UPS” TO SURVIVE
DICKERSON DIGEST ISSUE FIVE - APR- 2020 THE PROFIT LINE
RESTAURANTS PIVOT TO “POP-UPS” TO SURVIVE
These types of stores provide an ad-
vantage to the customer who wants
to avoid waiting in lines to enter a
grocery store for certain essentials. It
also helps maintain social distancing;
less furthering the risk of getting into
contact with an asymptomatic COVID
-19 carrier. Please reach out to me if
you would like more information or
to sign up. Once all of this is over,
restaurants and several businesses
are still going to have a difficult time
recovering if they are able to reopen.
Customers will continue to stay out
of these businesses due to lack of
funds and waiting lists for unemploy-
ment. The stimulus package has until
December to arrive to your house
thus further postponing funds. Bills
will have to be paid to catch up be-
fore we spend on dining experiences.
Restaurant owners will need to con-
tinue to pay bills and equipment leases
for frozen products. I anticipate this will
be a struggle for the long term. But there
is something we can do to ease the pain
many in the food industry face. In these
hard times, it is important to support
your local pop-up stores and grocerants.
Social media will be a great way to find
where these stores are appearing so you
can shop and make a difference. Re-
member to stay safe, practice social dis-
tancing, and take a positive outlook on
having to stay home by spending time
with your family by playing together and
laughing!
Contact Christina for more info at:
PAGE 9
ISSUE FIVE - APR- 2020 DICKERSON DIGEST TOOLS YOU CAN USE
COVID-19 STIMULUS PAYMENTS
READ THIS NOW! Informative note from Juan Pablo Gonzalez of JP&A Tax Services
The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently signed into law provides a one-time payment, among other items, to individuals to help ease the economic strain caused by the coronavirus epidemic.
Here are the details of the stimulus payment initiative.
Who qualifies to receive a payment? A one-time payment of $1,200 will be sent to most adults. For every qualifying child under age 17, families will receive an addi-tional $500. Retirees and people on disa-bility are also eligible to receive a pay-ment.
When will I get my payment? The IRS hopes to get the first batch of payments out the week of April 6. It may take up to a month for everyone to get their pay-ment, assuming everything goes as planned.
How are payments being made? If you included your bank account and routing information on your 2019 tax return, you would receive your stimulus payment via direct deposit. If you haven't filed your 2019 tax return, the IRS will use infor-mation from your 2018 tax return. If you did not include your bank account and routing information on either your 2019 or 2018 tax returns, the IRS will allow you to request direct deposit from a screen (under development) from their website. All others will receive their payment via a check in the mail.
Alert! Invalid bank information. If you have not filed your 2019 tax return AND the direct deposit information on your 2018 tax return is no longer valid (you have a new bank account or closed your old one), you will need to take action im-mediately! If you do nothing, the bank deposit will, hopefully, be rejected and you will receive your check in the mail. Expect a delay, however, as it may take some time to receive a check by mail. You can also try calling the IRS to update your information.
Will I get the entire amount? As with other government programs, there is an income phaseout. Here are the thresh-olds:
• Single adults with income of $75,000 or less get the full $1,200. The $1,200 payment is reduced by $5 for every $100 in income above $75,000. Full income phaseout is $99,000.
• Married couples with income of $150,000 or less get the full amount of $2,400. The payment is reduced by $5 for every $100, making the full payment phased out at $198,000.
• Head of Household adults (normally single adults with children or other dependents) will receive the full $1,200 payment if they earn less than $112,500. Reduced amounts will go out to Head of Household adults who earn up to $136,500.
How will my income be calculated? Your 2019 tax return will be used to deter-mine your income for purposes of wheth-
er you receive the full amount of the stim-ulus payment and how many qualifying children you have. If you haven’t filed your 2019 tax return, your 2018 tax return will be used.
Alert! File a tax return. If you have low income or someone who does not typical-ly file a tax return, you may wish to do so. A simple tax filing is all that is needed to ensure you receive the stimulus payment. Eventually, instructions to do this will be available on www.irs.gov/coronavirus.
Senior Alert! Seniors who did not file a tax return in 2018 or 2019 will automati-cally receive the payment based upon forms 1099-SSA and RRB-1099s. (April 1, 2020 U.S. Treasury press release)
Alert! Don't use my current situation. It may make sense to get your 2019 tax re-turn in immediately. Figure out if phaseouts using last year's information lowers your payment amount. If so, you may wish to file your 2019 now. So, pull out last year's return and take a look! Are the payments taxable? No. These pay-ments are not taxable.
Remember, this is only one of the
many relief components in recent-
ly passed legislation. There are
also unemployment benefits,
small business benefits and much
more to come.
PAGE 10
DICKERSON DIGEST ISSUE FIVE - APR- 2020 SOUND BITES
CLIENT SPOTLIGHT: GUME GARZA
Our client spotlight in this issue is self made success, Gume Garza. As a middle school student, he was nominated to compete in algebra. In college, his math skills led him to be asked by his teacher to tutor his fellow classmates and his love of numbers remains as a key to his current success. Gume began his 33-year career first as a mechanic and driver. He then made his move to having his own trucking company that has grown from one truck to 400! He is not only a leader in the trucking industry as the President and CEO of Royal Express, Inc., but also a health club visionary. He has transformed a former boat supply store into The Gym Legacy, a jewel of a gym, in North Laredo by IH 35 and Shiloh, full of thoughtful design and modern amenities. Here are some “sound bites” of our interview this month.
[JMD] What do you credit for
your success in business?
[GUME GARZA] The legal side of
the business is very important
and the advice you have given
me about how to structure my
businesses has made a differ-
ence for sure. But, I think
that persistence and being
there...I think pretty much,
that's what it is. You know,
anybody can do it. But, you
just have to be there.
[JMD] Do you mean “be there” as
in the business owner needs to
be at the business?
[GUME GARZA] I know people who
are about to have success or
who are already successful.
But, they feel like they're the
owners and we are never the
owners, I think. We’re the num-
ber one person responsible for
the success of the business,
you know, you have to be that.
You are never the owner. You
have to be the one to work
harder than everybody, harder
than anybody.
[JMD] So that kind of dovetails
with my next question. What
would your advice be to someone
who is wanting to start a busi-
ness?
[GUME GARZA] I like construc-
tion. I like to draw and every-
thing is related to a floor
plan of a house or anything you
want to create... trucking, a
gym, a hotel, whatever. When
you draw the floorplan of a
house, you draw some lines and
bathrooms and rooms and you can
move them pretty easily. Why?
Because they are just lines. I
always say, "Drawing doesn't
cost you anything. Neither does
paper”. So you can just draw
what you want and then make it
happen.
[JMD] What have you been
“drawing” lately? Anything you
can share?
[GUME GARZA] My daughter has a
project in mind and I grabbed a
little piece of paper and said,
"Okay. How many rooms do you
want? What size? Like the one I
have in the gym?" She said,
"Yes". So I start drawing. At
PAGE 11
DICKERSON DIGEST ISSUE FIVE - APR- 2020 SOUND BITES
CLIENT SPOTLIGHT: GUME GARZA
the end of the day, I said,
"Okay, so you will need five
thousand square feet and your
rent will be at least seven thou-
sand five hundred (dollars a
month). We discussed her project-
ed income and expenses to get a
clear picture. With more infor-
mation, I start drawing up the
numbers and told her, "You know
what? It makes no sense". And she
asked, "Why?". And I told her,
"Just look at the numbers" and
she was silent. I said, "I'm sor-
ry, but it is what it is". So, if
I was to give advice to someone
starting up like I gave to my
daughter, I would tell them they
need to draw first what it is
that they want. It's like a busi-
ness plan on a small scale. Just
draw what you want; focus in on
how much you are going to charge
and how much you are going to
spend and just look at it and
then go for it.
[JMD] How did she take your ad-
vice?
[GUME GARZA] We had a party pal-
ace I built by the strip mall
behind Times Square. Next door,
I bought a building for my son
when he was around 18/19, so he
could do party rentals for small
ones in a kind of club atmos-
phere. Now, in that little build-
ing, which is twelve hundred and
fifty square feet, I'm going to
build my daughter's project that
she wants to do. You know, the
building is paid for. Then we did
the numbers yesterday and over
the weekend, it NOW it does make
sense.
[JMD] Well that’s good news. We
will see you both soon, I hope,
to create her LLC (smiling). How
do you envision your business
after the pandemic?
[Gume Garza] I envision it very,
very well. It's going to be cra-
zy, yes. But I've been in the
trucking industry enough, for 33
years, but never a pandemic. But
I can call it a pandemic when the
peso goes down and when the econ-
omy goes bad. Those things are a
pandemic to me. I've learned that
it's always, always going to go
in reverse and I envision it is
going to be very crazy and very,
very busy and I’m getting pre-
pared for it.
PAGE 12
(956) 722-8891 (956) 728-7487
ISSUE FIVE - APR- 2020 DICKERSON DIGEST SPECIAL GUEST ARTICLE
US FEDERAL STIMULUS RELIEF
FOR COVID-19 FINANCIAL IMPACT
As the coronavirus (COVID-19) continues to affect local
communities and global economies, the US federal govern-ment unanimously passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, H.R. 748, This represents a $2 trillion aid package designed to help the economy while the containment efforts continue to stop the coronavirus pandemic. • COVID-19 has probably caused some concerns about
your financial well-being. However, there are relief measures available that may benefit you, such as:
• The IRS extended the April 15, 2020 federal income tax filing and payment deadline to July 15, 2020. However, we continue to work on filing returns as soon as possi-ble.
• First quarter estimated tax payments usually due April 15, 2020 are now extended to July 15, 2020.
• States are also providing tax relief for individuals and businesses.
• Emergency paid sick and family leave benefits are avail-able to employees (with some limitations and excep-tions).
• Employers, including those self-employed, have availa-ble refundable tax credits to offset the costs for provid-ing coronavirus-related leave benefits.
The following are some of the federal assistance included as part of the CARES Act. INDIVIDUAL TAX Recovery rebates will be sent to individuals in the following amounts:
• $1,200 per person/$2,400 to married couples and
• $500 per dependent child under age 17
Amounts will be phased out over the following ranges:
Determination made based on 2019 Adjusted Gross Income if return filed. Otherwise, 2018 will be used. If no returns filed, Social Security or Railroad Retirement benefit state-ments will be used. Treasury Department was directed to provide these rebates as soon as possible. BUSINESS TAX • Creates an employee retention tax credit for wages
paid by certain eligible employers adversely affected by the COVID-19 crisis;
• Postpones employer payroll tax payments, to Decem-ber 31, 2021, and December 31, 2022; Employers and self-employed individuals will be able to defer pay-ments of the employer share (6.2% of employee wages) of Social Security payroll taxes that would have other-wise been owed from the date of enactment of the leg-islation through December 31, 2020.
• Expands the use of Net Operating Losses (NOL) car-rybacks and carryforwards for corporate and noncorpo-rate businesses: 2018, 2019, 2020 NOLs to be carried-back 5 tax years, and removes 80% limitation to fully offset taxable income;
• NOL relief is extended to passthroughs and sole propri-etors by allowing excess business losses under section 461 for taxable years before 2021 and will allow
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By: Raul Garza, CPA, MPA, DABFA, Owner of Garza Accounting Professionals, PLLC
DICKERSON DIGEST ISSUE FIVE - APR- 2020 SPECIAL GUEST ARTICLE
US FEDERAL STIMULUS RELIEF FOR COVID-19 FINANCIAL IMPACT
carryover losses into subsequent taxable years as a technical correction to section 461(l)(2) enacted by the TCJA. • Increases the limitation, under 163(j), on the amount of interest expense businesses are allowed to deduct, to 50-
percent of taxable income, for 2019 and 2020; • “Qualified improvement property” classified as 15-year property under MACRS, which accelerates cost recovery and
makes it eligible for bonus depreciation.
SBA Loans Small businesses and not-for-profits in disaster declaration states can apply online for low-interest loans through the U.S. Small Business Administration (SBA). The government has declared the state of Texas as a state of disaster. • An SBA Section 7(b) Economic Injury Disaster Loan provides up to $2 million to help business with fewer than 500
employees pay fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the loss of revenue caused by a declared disaster. The loans cannot be used to cover lost profits.
• The interest rates for the loans are 3.75% for small businesses and 2.75% for not-for-profits. The SBA determines terms on a case-by-case basis, based on each borrower’s capacity for making monthly loan repayments. The maxi-mum loan term is 30 years.
• The loans also offer a one-year deferment on payments. This means that the first payment isn’t due until a year after the official date of the loan. However, interest starts accruing on the loan the moment the funds are disbursed.
Small businesses can apply for the loans at: disasterloan.sba.gov/ela. As of the date of this article, the SBA’s website was not accepting the online application due to the high demand. The best way to submit the applica-tion is to download the Business Loan Application (Form 5), complete and either upload through online portal or send via mail to the following address:
U.S. Small Business Administration Processing and Disbursement Center 14925 Kingsport Rd. Ft. Worth, TX 76155-2243
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1 0 7 C A L L E D E L N O R T E , S U I T E 1 5 A L A R E D O , T E X A S 7 8 0 4 4 - 2 6 6 4
T E L : ( 9 5 6 ) 7 2 7 - 4 1 2 2 E M A I L : C P A F I R M @ G A P - C P A . C O M
DICKERSON DIGEST ISSUE FIVE - APR- 2020 FINAL THOUGHTS
WHAT WILL YOU DO WITH YOUR GIFT OF TIME DURING QUARANTINE?
Dear Friends,
While many of us are home, it is easy to fall into the trap of Netflix binging, or spending too much time on social media. We find it hard to remain productive when we are out of the workplace. Some of you are also feeling anxious about what is going to happen next, when will we be back to normal. How quickly will be bounce back, both physically and fiscally. The frustration mounts because, for most of us there is not much we can do but follow the CDC guidelines, stay home and keep social distancing. As you know, I am a posi-tive person by nature, so when life gives you lemons make lemonade. You can take this time that you have with your family and really think about the important documents that you have been putting off, because you didn’t have time or wouldn’t make time before this quarantine. Now you have time and your family around to discuss how you would like things to be handled if you are ill, incapacitated or if you are to pass away. Here are my five “must have” key docu-ments that you need to have in place:
1) Durable Power of Attorney: Authorizes your agent to make financial, real estate and other fis-cal related decisions if you are incapacitated.
2) Medical Power of Attorney (Healthcare Pow-er of Attorney): Designates who can make health care decisions for you if you are incapacitated.
3) Designation of Guardian for Minor Chil-dren: Designates who can be your children’s guardian to care for them if you die or are incapac-itated.
4) Designation of Guardian in the Event of Later Need: Designates who will be your guardi-an in the event you are incapacitated, and a Guardian needs to be appointed. Also, you can specify who you do not want to be your Guardi-an.
5) Directive to Physician (Living Will): Directs your family and physician if you are in a terminal condition or if you are in an irreversible condi-tion.
These documents are a must if you find yourself incapacitated, the problem is we don’t know when that is going to happen. The key is to be prepare now, before something happens. At The J.M. Dickerson Law Firm, we make it easy for you to have your documents ready.
Let us help you to get this done and check it off your list. If not NOW, when. Go to the link I have provided below for our Guide to Lasting Peace of Mind, to get started. And as a bonus, I will also give you a copy of my ebook, The Tex-ans’ Guide of the Probate Process.
Stay safe and take advantage of this down time, it may not happen again.
*Website for download to Guide to Lasting
https://dickersonlaw.com/free-guide-to-lasting-peace/
*Website for download to Texan Probate Book: https://dickersonlaw.com/free-probate-guide-for-texans
Contact us today so we can visit on a one-to-one basis by calling (956) 267-5214.
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Best Regards, Joseph Michael Dickerson
The persistence of memory_1931_Salvador Dali